What Will be the Business Model of the 21st Century Law Firm?

Guardian Times The similarities between publishing and legal industries have already been widely commented on. Publishers of all kinds are at a crossroads, and are busy experimenting with business models.

Today News International unveiled their new web designs for The Times and Sunday Times, prior to them disappearing behind a paywall later this year. Murdoch is banking that a traditional subscription business model will work in the internet age.

Meanwhile Guardian Media Group has launched its Open Platform – the complete opposite of the Times approach. The Guardian and Observer are providing their content for developers to reuse and repurpose in whatever applications they want. Some types of reuse are free, others require registration and licensing or revenue sharing. Just to be clear – that means The Guardian will pay you to republish their content!

The Times wants to wall its content off from the rest of the internet. The Guardian wants to see its content (re)used as widely as possible.

Which model will work?

In an age where information is a commodity you need three things to operate a paywall: unique content, great reputation and niche, targeted information from which readers can derive value. That’s real value as-in money saved, or money earned. That’s why the Financial Times can operate a paywall, as can Tessa Shepperson. But the Times? I’m sceptical.

The Guardian on the other hand is embracing the idea of a sell-through business model where revenues are shared with distribution partners. This is a proven internet business model similar to the Amazon Affiliate and Google Adsense programmes that helped cement both of them as dominant players in their markets. I am certain this will lead to The Guardian having more online readers than The Times. Could it lead them to a dominant position?

What can we learn for the future of the legal profession?

Two very different approaches. One embracing all the opportunity (and risks) of the new technology, and one betting that old models still work. Which one wins will likely provide an interesting thesis for MBA students in the future, and an interesting reference for law firms.

My take?

  • If you are a large national firm, your objective should be to commoditize legal information. Give it away for free, share it as widely as you can, and use the mind-share you gain to sell services. Real services that provide real value.
  • If you are a small firm of solicitors, work to build your brand as an expert, then figure out how you can provide a subscription service that provides real value to the fans you have gained.
  • If you are a midsize regional law firm, you’d better decide which way to jump, because the average middle will be squeezed.

What do you think? Am I wrong? And what do you think it means for the legal profession… if anything?

It’s all about Values

Social Media Social media engagement is about having conversations. Conversations with customers and prospective customers wherever they happen to congregate on the web.

Shireen asked today how can you protect your brand if you allow staff to use Twitter, write blogs or use other social media?

Old style media and PR were about command and control. Create a brand and an image, employ a raft of people to craft words that fit the image, and then distribute them through mass media channels.

In the social media world of today your customers are having conversations about you in public. You can no longer control the message. But you can influence it. No policy will be able to cover all the aspects of a conversation though. Instead you need values. Values enable employees to make smart decisions by themselves about how to engage.

Don’t Zappos values say everything staff need to know about how to engage with people on social media? Microsoft’s blog policy is famously two words: Blog Smart. It’s about empowering staff to make smart decisions based on company values.

Instead of creating a bunch of command and control rules that nobody reads, think about the values that embody your company and how you can use them to enable staff to make decisions by themselves, engage customers, and win new business.

What do you think? Any other ideas to add?

Consumerisation of IT

Clippy

Sadly I am old enough to remember when you would walk into your average corporate and be wowed by the latest technology.

When today’s Net Generation graduates walk into your firm they will probably find that they have more computing power in their home PC than the one on their desk. In some cases they may even have more computing power in their pocket!

For the last decade IT departments have been driven by lowering costs, reducing risk and delivering a “good enough” experience. But as Jason writes, today’s graduates are not about to accept this.

Some of today’s smartest graduates are choosing to forgo corporate careers for entrepreneurial endeavours. And who can blame them. With just a laptop, an internet connection, and free or low cost consumer-focussed software from the web, sole traders and small businesses can appear much larger than they are, and effectively compete with the big players all at much lower cost.

How can Corporate IT Compete?

First realise that IT is no longer just about cost reduction and lower risk, but also customer service and staff retention.

Look at delivering value to the business across a wider range of metrics: increased revenues, increased customer satisfaction and increased profit per customer. Look at how your IT systems can help the business in terms of new talent recruitment and retention.

What you can do:

  1. Enable staff to work flexibly, from home, from the coffee shop, and yes, even the office. Remove the need for employees to be physically at their desk during office hours.
  2. Provide tools that make it easy to find expertise and knowledge – tools that mimic the consumer tools they are used to: blogs, wikis and personal sites not dissimilar to LinkedIn or Facebook.
  3. Provide tools that enable staff to connect in real time, from any location via audio, video and IM.
  4. Deliver on-demand self-paced training materials through short snippets such as podcasts that can be easily integrated into hectic lives. Enable staff to upload their own best practices and ideas and use social computing techniques to enable the best content to bubble-up to the top.
  5. Provide corporate-class social computing tools to enable Net Gen recruits to express themselves in a way that is natural to them.
  6. Enable staff to stay connected, wherever they may be from the device of their choice. Let staff select their own IT equipment and use virtualization technology to stay in control of corporate assets and security.
  7. Provide platforms for staff and customers to communicate and meet customer expectations for rich online experiences that help create a sense of community.

Related information:

Web Favourites Apr 12 2010

image This post is part of a weekly/bi-weekly roundup of things that I read and found interesting. There won’t be a lot of comment from me, but hopefully you will find the links useful. Enjoy!

Interesting stuff I came across this week:

Who will invest in Law Firms; Not Private Equity it Seems – Law firm partners needn’t think about a golden goodbye just yet. According to Richard Susskind, private equity don’t want the hassle of managing law firms based around the billable hour, so instead their money is headed towards legal process outsourcers and fixed-fee lawyer boutiques.

The Collapse of Complex Business ModelsClay Shirky on what happens when business models stop adding client value and just add cost. Be sure to read the ATT anecdote about a third of the way through. The ATT approach precisely reflects what I am hearing from one law firm after another that tell me they don’t want to do commodity, process driven work. Shirky concludes “When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things… it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future”

SharePoint 2010, Office 2010 Launch Date Confirmed

Ofice 2010 Logo Microsoft have confirmed that the launch date for SharePoint 2010 and Office 2010 will be 12 May 2010. This is the date that business customers will be able to buy the product, with consumers getting to buy the product around a month later.

I have been running the Office 2010 Beta for around a six months now, and I have to say it is without doubt the most stable Beta I have ever used. I don’t think I can recall a crash that was due to a fault in Office itself, and that probably makes this Beta more stable than the likes of Office 2000 and Office XP that many folk are still using.

This launch also marks a significant, and potentially high-risk, change of strategy for Microsoft, seeing them tackle the threat of free alternatives with their own free editions and fully embrace cloud computing:Excel Web App

  • Free, browser-based versions of Word, Excel and PowerPoint will be available to anyone with a hotmail account. These will be called the Office Web Apps. These web apps will also be available to businesses to run internally as an extension of SharePoint 2010.
  • A free cut-down version of the Office client suite will be bundled with new PCs as Microsoft Works is discontinued. This will be called Microsoft Office Starter 2010.
  • SharePoint 2010 embraces multi-tenancy enabling it to be used much more cost efficiently as a cloud-hosted collaboration platform.
  • The addition of SharePoint Workspace – a client application enabling you to take SharePoint sites offline and continue working when out of the office and disconnected from the web.

Exchange Online Default Mailbox Size Increased

Microsoft Exchange The default mailbox size for Microsoft Exchange Online has been increased from 5 GB to 25 GB. This 5x increase is free of charge and is automatically implemented for new users. You can increase existing users’ mailboxes to 25 GB if you need as the overall allocation for mailboxes has been increased to (25GB x number of users) instead of (5GB x number of users).

Sign-up for a 30-day free trial of Exchange Online and the rest of the BPOS suite here.

Web Favourites Mar 18 2010

Spring Daffodils It’s been a little while since our last post. We’ve been heads-down at Connectegrity HQ for the last few weeks and the blog has taken a bit of a back seat. But as Winter has turned to Spring, we are back now with the latest roundup of things that we’ve read and found interesting. Enjoy!

Interesting stuff I came across this week:

Rolling out Social Tools In Law Firms – The first of what promises to be a great series of posts on social computing in legal sector. I really liked Steve’s “tight-loose” approach to emergent collaboration: “There are some things you need to grip tightly… but then leave many areas loose and flexible so people experiment and try things out to see what works for them. You don’t always know how it’s going to be used and you can be pleasantly surprised with how creative people can be.  Very quickly you find that some good practices start to emerge which become the standard way of working”

“Alternative” Pricing in a Billable Hour World – Interesting take on how to quote and manage a fixed price for a piece of work.

Procter & Gamble tries a bring-your-laptop-to-work program – How the NetGen is changing workplace culture: P&G can afford to buy its employees laptops. But it is instead letting several hundred of its workers use their own laptops*.

* Interestingly this article has been edited since I first read it – the original piece also talked about potential culture clashes between Baby Boom and NetGen employees as the NetGen-ers worked flexibly using laptops, wifi and mobile phones from sofas, coffee bars etc.

Web Favourites Feb 22 2010

This post is part of a weekly/bi-weekly roundup of things that I read and found interesting. There won’t be a lot of comment from me, but hopefully you will find the links useful. Enjoy!

Interesting stuff I came across this week:

The Business Case for Giving Away Your Best Work for FREE! – 10 reasons to give away your work for free.

The “Free” Dilemma – Bits vs. Atoms – “…understand one of the differences between atoms and bits:
Atoms don’t scale. Bits do… Your free strategy should be mostly based on bits… Use the atom-power to create remarkable bit-based free stuff that spreads”

Law firms and Newspapers – Same or Different? – “what the newspapers are suffering heavily from now is what many smaller law firms are beginning to suffer from and will undoubtedly suffer heavily from in the future – their primary product being available for free on the web.”

Google Social Search

Well excuse me if I only just noticed this (it seems like Google announced social search back in Oct) but this is simply the best innovation in Internet search in years.

Here’s what my search results included today when I searched for Knowledge Management:

Google Social Search Results

What you can see here is personalised search results based on my social network as Google sees it. Google looks at your Twitter network, GMail contacts and profile links to figure this out.  Strange it doesn’t seem to look at blogs I follow in Google Reader, but hopefully that will come soon.

Great idea!

Legal Opportunities #1: Speed

‘It’s almost impossible as a consumer to be able to differentiate one law firm from another. I can’t tell you the number of websites I’ve looked at which describe the firm as “modern with traditional values, forward-thinking with a focus on customer service…” .’ That sort of stock phase was ‘repeated ad infinitum’. ‘If you’re a member of the public it’s almost impossible to choose between firms and that is why they start thinking: “If I can’t tell the difference, I might as well just get the cheapest.”’

Craig Holt – QualitySolicitors.com, The Big Bang Report.

How can solicitors stand out from the crowd to build a distinctive and thriving business? In this first post of a series I am going to look at opportunities for law firms to create a distinctive niche for themselves, so that they can compete effectively in the post Legal Services Act market.

Opportunity #1: Speed

image

Countless of successful businesses have been built on the premise of doing things more quickly than the competition:

  • DHL took international parcel delivery and guaranteed next day delivery
  • Snappy Snaps took photo processing from days to hours
  • Kwik Fit built a brand out of being fastest for tyre changes

The nice thing about all these is that time pressed customers will typically pay a premium for rapid service. If I were a law firm I might be thinking about offering 30-minute wills, 15-minute lunchtime speed appointments, and for businesses, maybe things like contract reviews with guaranteed same-day turnaround.

What do you think?